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2022 (7) TMI 978 - AT - Central ExciseCENVAT Credit of 2% CVD paid - Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE - import of steam coal - whether Cenvat credit of 2% CVD paid on import of steam coal is admissible or not to the assessee/respondents in accordance with Notification No. 12/2012-Cus dated 17/03/2012 as amended, in terms of embargo contained under Rule 3 of the Cenvat Credit Rules, 2004? - HELD THAT - The assessee herein have availed Cenvat credit, in respect of 1%/2% CVD paid as per Notification No. 12/2012-Cus. The specific bar on which the Revenue is harping upon is provided under Rule 3 (1) (i) (a) (b) ibid for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE but, there is no such bar in respect of CVD paid under Customs Notification No.12/2012-Cus, therefore the assessee/respondents are eligible for Cenvat credit in respect of 1% or 2% CVD, as the case may be, paid under Notification No. 12/2012-Cus. Otherwise also, the issue involved in these appeals is no more res integra and is covered in favour of assessee in view of various decisions of this Tribunal on the identical issue. In the case of SHREE ARIHANT TRADELINKS INDIA PRIVATE LIMITED AND MAHA SHAKTI COKE VERSUS C.C.E., KUTCH (GANDHIDHAM) 2021 (12) TMI 581 - CESTAT AHMEDABAD it was held that the appellants/assessee therein are eligible for Cenvat credit in respect of 2% CVD paid under Notification No. 12/2012-Cus. Since a consistent view has been taken by this Tribunal in favour of assessee on this issue from time to time, there are no reason to take a contrary view, and therefore there are no merits in the appeals filed by Revenue and the same are hereby dismissed.
Issues Involved:
1. Admissibility of Cenvat credit of 2% Countervailing Duty (CVD) paid on imported steam coal. 2. Interpretation of Rule 3 of the Cenvat Credit Rules, 2004. 3. Applicability of various notifications and previous judgments. Issue-Wise Detailed Analysis: 1. Admissibility of Cenvat Credit of 2% CVD: The core issue in these appeals is whether the Cenvat credit of 2% CVD paid on the import of steam coal is admissible to the assessee/respondents under Notification No. 12/2012-Cus dated 17/03/2012, as amended. The Revenue contends that the Cenvat credit is not available to the importer/manufacturer as the duty paid does not align with the specified rates under the Central Excise Tariff Act, 1985. The Tribunal, however, found that there is no bar in respect of CVD paid under Customs Notification No. 12/2012-Cus, thereby allowing the Cenvat credit. 2. Interpretation of Rule 3 of the Cenvat Credit Rules, 2004: The Tribunal examined Rule 3 of the Cenvat Credit Rules, 2004, which allows manufacturers or service providers to take credit of various duties, including the additional duty leviable under Section 3 of the Customs Tariff Act. The Revenue's argument hinged on the proviso to Rule 3(1)(i), which restricts Cenvat credit for goods exempted under certain Central Excise notifications. However, the Tribunal clarified that this restriction does not apply to CVD paid under the Customs Notification No. 12/2012-Cus. The Tribunal noted that the Commissioner mixed up Rule 3(1)(i) and Rule 3(1)(vii), leading to an erroneous denial of Cenvat credit. 3. Applicability of Notifications and Previous Judgments: The Tribunal referred to several precedents to support its decision. It highlighted that the issue is no longer res integra, citing cases like M/s Hindustan Zinc Ltd vs. Commissioner, CGST, and others, where it was consistently held that Cenvat credit on 2% CVD paid under Customs Notification No. 12/2012-Cus is admissible. The Tribunal also distinguished the Gujarat High Court's decision in Lonsenkiri Chemicals Industries, noting that it involved different factual circumstances where the assessee availed benefits under specific Central Excise notifications. Conclusion: The Tribunal dismissed the Revenue's appeals, affirming that the assessees are entitled to Cenvat credit on the 2% CVD paid under Notification No. 12/2012-Cus. The Tribunal emphasized that the restriction in Rule 3(1)(i) of the Cenvat Credit Rules does not apply to CVD paid under the said Customs notification. The consistent view taken by various benches of the Tribunal and the lack of any bar in Rule 3(1)(vii) for CVD paid under Customs Notification No. 12/2012-Cus formed the basis of this decision. The Tribunal also found no grounds for invoking the extended period of limitation, as the issue involved was purely interpretative, and there was no suppression of facts by the assessees.
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